brookings failed state specialist tapped for mexico

NYTimes | Secretary of State Hillary Rodham Clinton, continuing her show of solidarity with Mexicans in their struggle against drug trafficking, toured a high-tech police base in Mexico City on Thursday and greeted diplomats from the American Consulate in this northern city, which was sprayed with gunfire last fall by a suspected drug gang member.

But Mrs. Clinton was nearly upstaged by reports that the United States planned to nominate a Cuban-born American diplomat who has written extensively about “failed states” as the next ambassador to Mexico.

The State Department declined to comment on reports that the diplomat, Carlos Pascual, a former ambassador to Ukraine who is currently the director of foreign policy at the Brookings Institution, would be nominated.

But a person familiar with the administration’s deliberations said Mr. Pascual was President Obama’s choice for the post. Mr. Pascual did not respond to an e-mail message asking for comment.

The Mexican daily newspaper El Universal, citing unnamed sources, reported Thursday that the United States had submitted Mr. Pascual’s name to the Mexican government.

The paper noted that Mr. Pascual’s specialty was in dealing with conflict-ridden states. He served as the coordinator for reconstruction and stabilization in the State Department, a post that involved working with several agencies to develop strategies for broken countries like Afghanistan.

That could raise hackles among some Mexicans, who take umbrage at recent assertions by American analysts that drug-related violence has so destabilized Mexico that it is danger of becoming a failed state.

brazil's president Luiz Inácio Lula da Silva

"cold fusion" researchers interview

American Chemical Society Conference 45 minute interview with the scientists seeking stimulus funding for their interesting low energy nuclear reaction chemistry projects.

zbig puts the cramer tapeworm on front street

u.s. drug policies failed, fueled mexico's drug war

Washington Post | "Clearly what we've been doing has not worked," Clinton told reporters on her plane at the start of her two-day trip, saying that U.S. policies on curbing drug use, narcotics shipments and the flow of guns have been ineffective.

"Our insatiable demand for illegal drugs fuels the drug trade," she added. "Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police, of soldiers and civilians."

Clinton appeared to go further than any senior government official in recent years in accepting a U.S. role in the long-contentious issue of the Latin American narcotics trade. In the past, U.S. politicians have accused Mexico, the main gateway for cocaine, heroin and other drugs entering the United States, of not doing enough. But two years ago, President Felipe Calderon unleashed the Mexican military on traffickers, a move that has contributed to an explosion of violence by drug gangs. More than 7,000 Mexicans have been killed in the bloodletting since January 2008, with the gangs battling authorities and one another for supremacy.
Secretary of State Hillary Rodham Clinton traveled to Mexico on Wednesday with a blunt mea culpa, saying that decades of U.S. anti-narcotics policies have been a failure and have contributed to the explosion of drug violence south of the border.

taliban's pakistan patron

NYTimes | The Taliban has been able to finance a military campaign inside Afghanistan largely through proceeds from the illegal drug trade and wealthy individuals from the Persian Gulf. But American officials said that when fighters needed fuel or ammunition to sustain their attacks against American troops, they would often turn to the ISI.

When the groups needed to replenish their ranks, it would be operatives from the S Wing who often slipped into radical madrasas across Pakistan to drum up recruits, the officials said.

The ISI support for militants extends beyond those operating in the tribal areas of northwest Pakistan. American officials said the spy agency had also shared intelligence with Lashkar-e-Taiba, the Pakistan-based militant group suspected in the deadly attacks in Mumbai, India, and provided protection for it.

Mr. Zardari took steps last summer to purge the ISI’s top ranks after the United States confronted Pakistan with evidence about the Indian Embassy bombing. Mr. Zardari pledged that the ISI would be “handled,” and that anyone working with militants would be dismissed.

Yet with the future of Mr. Zardari’s government uncertain in the current political turmoil and with Obama officials seeing few immediate alternatives, American officials and outside experts said that Pakistan’s military establishment appears to see little advantage in responding to the demands of civilian officials in Islamabad or Washington.

As a result, when the Haqqani fighters need to stay a step ahead of American forces stalking them on the ground and in the air, they rely on moles within the spy agency to tip them off to allied missions planned against them, American military officials said.

Reuters | The Carnegie Endowment for International Peace has put out a paper on the need to reform Pakistan’s intelligence agencies just as army chief General Ashfaq Kayani is winning much praise for playing what is seen as a decisive role in defusing the country’s latest political crisis and saving democracy.

French scholar Frederic Grare says in the paper the reform and “depoliticisation” of the agencies, in particular the military’s Inter-Services Intelligence (ISI), is imperative.

Grare says there is no magic formula to transform overnight an authoritarian regime into a full-fledged democracy but says there’s no excuse for the government to sit on its hands (”patience should not be an alibi for inaction”).

our crowded future

Johns Hopkins | The UN estimates from 1960 for the 2000 world population were just 3.6% higher than actual. Today 75 million people are added to the world every year and 25 million come from India, Pakistan, Bangladesh and Indonesia. China adds 9 million and the US 3 million. Short of catastrophic die-off - at current growth levels, in the year 2050 there are projected to be MORE than 9.3 billion people.

e.u. president calls bailout "a road to hell"

Washington Post | The president of the European Union on Wednesday ripped the Obama administration's economic policies, calling its deficit spending and bank bailouts "a road to hell."

The comments by Prime Minister Mirek Topolanek of the Czech Republic, which holds the E.U.'s rotating presidency, startled some U.S. and European officials, who are preparing for President Obama's visit next month to several European cities, including Prague, the Czech capital.

In an address to the European Parliament in Strasbourg, France, Topolanek abandoned diplomatic niceties and blasted Washington for approving a $787 billion economic stimulus package, which he said encouraged "protectionist" trade policies. He said the overall U.S. strategy for ending the recession would flood global markets with too many dollars and lead to bigger problems.

"All of these steps, these combinations and permanency, is the road to hell," Topolanek said. "The United States did not take the right path."

exponential microculture

gorknet | Few ideas are so preposterous that no one at all takes them seriously, and this idea - that God, or at least the universe, might be the ultimate large-scale computer - is actually less preposterous than most. The first scientist to consider it, minus the whimsy or irony, was Konrad Zuse, a little-known German who conceived of programmable digital computers 10 years before von Neumann and friends. In 1967, Zuse outlined his idea that the universe ran on a grid of cellular automata, or CA. Simultaneously, Ed Fredkin was considering the same idea. Self-educated, opinionated, and independently wealthy, Fredkin hung around early computer scientists exploring CAs. In the 1960s, he began to wonder if he could use computation as the basis for an understanding of physics.

Fredkin didn't make much headway until 1970, when mathematician John Conway unveiled the Game of Life, a particularly robust version of cellular automata. The Game of Life, as its name suggests, was a simple computational model that mimicked the growth and evolution of living things. Fredkin began to play with other CAs to see if they could mimic physics. You needed very large ones, but they seemed to scale up nicely, so he was soon fantasizing huge - really huge - CAs that would extend to include everything. Maybe the universe itself was nothing but a great CA.

The more Fredkin investigated the metaphor, the more real it looked to him. By the mid-`80s, he was saying things like, "I've come to the conclusion that the most concrete thing in the world is information."

Many of his colleagues felt that if Fredkin had left his observations at the level of metaphor - "the universe behaves as if it was a computer" - he would have been more famous. As it is, Fredkin is not as well known as his colleague Marvin Minsky, who shares some of his views. Fredkin insisted, flouting moderation, that the universe is a large field of cellular automata, not merely like one, and that everything we see and feel is information.

Many others besides Fredkin recognized the beauty of CAs as a model for investigating the real world. One of the early explorers was the prodigy Stephen Wolfram. Wolfram took the lead in systematically investigating possible CA structures in the early 1980s. By programmatically tweaking the rules in tens of thousands of alterations, then running them out and visually inspecting them, he acquired a sense of what was possible. He was able to generate patterns identical to those seen in seashells, animal skins, leaves, and sea creatures. His simple rules could generate a wildly complicated beauty, just as life could. Wolfram was working from the same inspiration that Fredkin did: The universe seems to behave like a vast cellular automaton.

Even the infinitesimally small and nutty realm of the quantum can't escape this sort of binary logic. We describe a quantum-level particle's existence as a continuous field of probabilities, which seems to blur the sharp distinction of is/isn't. Yet this uncertainty resolves as soon as information makes a difference (as in, as soon as it's measured). At that moment, all other possibilities collapse to leave only the single yes/no state. Indeed, the very term "quantum" suggests an indefinite realm constantly resolving into discrete increments, precise yes/no states.

science seeking stimulus?

EETimes | Cold fusion was first reported in 1989 by researchers Martin Fleischmann and Stanley Pons, then with the University of Utah, prompting a global effort to develop the technology. Normal fusion reactions, where hydrogen is fused into helium, occur at millions of degrees inside the Sun. If room temperature fusion reactions could be realized commercially, as Fleishchmann and Pons claimed to have achieved inside an electrolytic cell, it promised to produce abundant nuclear energy from deuterium--heavy hydrogen--extracted from seawater.

Other scientists were unable to duplicate the 1989 results, thereby discrediting the work.

The theoretical underpinnings of cold fusion have yet to be adequately explained. The hypothesis is that when electrolysis is performed on deuteron, molecules are fused into helium, releasing a high-energy neutron. While excess heat has been detected by researchers, no group had yet been able to detect the missing neutrons.

Now, the Naval researchers claim that the problem was instrumentation, which was not up to the task of detecting such small numbers of neutrons. To sense such small quantities, Mosier-Boss used a special plastic detector called CR-39. Using co-deposition with nickel and gold wire electrodes, which were inserted into a mixture of palladium chloride and deutrium, the detector was able to capture and track the high-energy neutrons.

The plastic detector captured a pattern of tiny clusters of adjacent pits, called triple tracks, which the researchers claim is evidence of the telltale neutrons.

Other presenters at the conference also presented evidence supporting cold fusion, including Antonella De Ninno, a scientist with New Technologies Energy and Environment (Rome), who reported both excess heat and helium gas.

"We now have very convincing experimental evidence," De Ninno claimed.

Tadahiko Mizuno of Japan's Hokkaido University also reported excess heat generation and gamma-ray emissions.

Houston Chronicle | If such experiments did produce fusion reactions, they would generate highly energetic neutrons as a byproduct. These are what Mosier-Boss says her San Diego-based group has found.

“If you have fusion going on, then you have to have neutrons,” she said. “But we do not know if fusion is actually occurring. It could be some other nuclear reaction.”

Today’s announcement is based partly on research published by Mosier-Boss’ group last year in the journal Naturwissenschaften. In this sense, she has not repeated the mistake of Pons and Fleischmann, who announced their findings before they had been tested by the peer-review process and published in a scientific journal.

But that does not mean the results indicate cold fusion, said Paul Padley, a physicist at Rice University who reviewed Mosier-Boss’ published work.

“Fusion could produce the effect they see, but there’s no plausible explanation of how fusion could occur in these conditions,” Padley said. “The whole point of fusion is, you’re bringing things of like charge together. As we all know, like things repel, and you have to overcome that repulsion somehow.”

The problem with Mosier-Boss’ work, he said, is that it fails to provide a theoretical rationale to explain how fusion could occur at room temperatures. And in its analysis, the research paper fails to exclude other sources for the production of neutrons.

“Nobody in the physics community would believe a discovery without such a quantitative analysis,” he said.

Still, the announcement may turn heads, given its stage at the American Chemical Society’s big meeting and the fact that the organization promoted it to science journalists in advance.

“It’s big,” said Steven Krivit, founder of the New Energy Times publication, which has tracked cold fusion developments for two decades.

Krivit said the neutrons produced by Mosier-Boss’ experiments may not be caused by fusion but perhaps some new, unknown nuclear process.

“What we’re talking about may be more than anybody actually expected,” he said. “We’re talking about a new field of science that’s a hybrid between chemistry and physics.”

you'd have to become it to know....,

fist tap to my man Wizz

what do you get if you divide science by God?

BBC News | A prize-winning quantum physicist says a spiritual reality is veiled from us, and science offers a glimpse behind that veil. So how do scientists investigating the fundamental nature of the universe assess any role of God, asks Mark Vernon.

The Templeton Prize, awarded for contributions to "affirming life's spiritual dimension", has been won by French physicist Bernard d'Espagnat, who has worked on quantum physics with some of the most famous names in modern science.

Quantum physics is a hugely successful theory: the predictions it makes about the behaviour of subatomic particles are extraordinarily accurate. And yet, it raises profound puzzles about reality that remain as yet to be understood.

The bizarre nature of quantum physics has attracted some speculations that are wacky but the theory suggests to some serious scientists that reality, at its most basic, is perfectly compatible with what might be called a spiritual view of things.

Some suggest that observers play a key part in determining the nature of things. Legendary physicist John Wheeler said the cosmos "has not really happened, it is not a phenomenon, until it has been observed to happen."

D'Espagnat worked with Wheeler, though he himself reckons quantum theory suggests something different. For him, quantum physics shows us that reality is ultimately "veiled" from us.

The equations and predictions of the science, super-accurate though they are, offer us only a glimpse behind that veil. Moreover, that hidden reality is, in some sense, divine. Along with some philosophers, he has called it "Being".

the mexican evolution?

NYTimes | America’s distorted views can have costly consequences, especially for us in Latin America. Secretary of State Hillary Clinton’s trip to Mexico this week is a good time to examine the misconception that Mexico is, or is on the point of becoming, a “failed state.”

This notion appears to be increasingly widespread. The Joint Forces Command recently issued a study saying that Mexico — along with Pakistan — could be in danger of a rapid and sudden collapse. President Obama is considering sending National Guard troops to the Mexican border to stop the flow of drugs and violence into the United States. The opinion that Mexico is breaking down seems to be shared by much of the American news media, not to mention the Americans I meet by chance and who, at the first opportunity, ask me whether Mexico will “fall apart.”

The worldwide financial crisis is intensifying our ancient dramas of poverty and inequality. But the most acute problems are the increased power and viciousness of organized crime — drug trafficking, kidnappings and extortion — and an upsurge in ordinary street crime.

This may be the most serious crisis we have faced since the 1910 Mexican Revolution and its immediate aftermath. More than 7,000 people, most of them connected to the drug trade or law enforcement, have died since January 2008. The war against criminality (and especially the drug cartels) is no conventional war. It weighs upon the whole country. It is a war without ideology, rules or a shred of nobility.

It most assuredly will not. First, let’s take a quick inventory of the problems that we don’t have. Mexico is a tolerant and secular state, without the religious tensions of Pakistan or Iraq. It is an inclusive society, without the racial hatreds of the Balkans. It has no serious prospects of regional secession or disputed territories, unlike the Middle East. Guerrilla movements have never been a real threat to the state, in stark contrast to Colombia.

Most important, Mexico is a young democracy that eliminated an essentially one-party political system, controlled by the Institutional Revolutionary Party, that lasted more than 70 years. And with all its defects, the domination of the party, known as the P.R.I., never even approached the same level of virtually absolute dictatorship as that of Robert Mugabe in Zimbabwe, or even of Venezuela’s Hugo Chávez.

radura

In their push to convince people that they are protecting us from foodborne illnesses the federal government is moving to allow irradiation of more food items. Meat and leafy vegetables are in that growing list.

Consumers should know that the FDA has said that the word “pasteurization” is an acceptable substitute for “irradiation. Second, the package label required when food is irradiated includes the international symbol for irradiation of foods, called the “radura”.

It looks remarkably pleasant. If you watch this sort of thing you might realize how similar the irradiated food symbol is to the logo for the US Environmental Protection Agency. This is an important label that you will want to recognize for what it is, this food has been IRRADIATED.

a non-formal look at the non-formal economy

Real World Economics Review | Non-formal economic exchange is not a relic of the distant past nor is it a practice limited to the most underdeveloped and economically “backward” of modern times. It is ubiquitous, yet frequently overlooked; under various guises, non-formal economies exist today alongside and intermixed with formal markets, even in the most advanced capitalist countries. From the trading of snacks in an elementary school playground to the trafficking of people all around the world, the workings of non-formal economies are embedded in our daily lives, actively shaping everything from bank policies to foreign policies. The world we know floats atop a tumultuous ocean of non-formal economics. It’s about time economists—and the ordinary person on the street—take a look.

Every day, in the privacy of their homes people produce goods and services which are theoretically “non-economic”. Every year almost three trillion dollars is laundered worldwide––also “non-economic” (Lilley 2007, 32). The “non-economic” are consigned to the margins of analysis by the definitional poverty of mainstream economics; it is the “other” of economics, existing outside of the formal purview. Mainstream economic analysis shines its dissertational light on an exceedingly narrow and superficial field. But the distinctions erected by the mainstream discourse are purely conceptual and often don’t hold in reality; households depend on their informal activities such as non-wage labor to sustain their formal ones, and similarly, money launderers depend on formal banking institutions to transform their non-economic (i.e. illegal) activities into economic profits (Nordstrom 2007, 21). Non-formal economies do not operate independently of their formal counterparts, yet the idea of “co-existence” does not grasp the complex engagement and interplay between the two. The formal and non-formal face each other as dependants, each working with and through the other. In his analysis of modern black markets, R.T. Naylor finds that “what has emerged today is a set of interrelated, mutually supporting black markets (still usually thin and imperfect) within which there exists a mix of individual entrepreneurs along with ‘firms’ large and small, all engaged in essentially arms-length commercial exchanges. No longer isolated, these black markets are institutionally embedded in the legal economy” (Naylor 2005, 3). The mutually constituting realms of the formal and non-formal economies can no longer be clearly distinguished. Their boundaries overlap and obscure; economic reality is a messy one

ending the monopoly of neoclassical economics

Real World Economics Review | Climate change is perhaps the most threatening aspect of the ecological crisis but not the only one. Reduced biological diversity, reduced water availability and deteriorating water quality in some regions exemplify other relevant dimensions. On the financial side, the ‘market mechanism’ has been unable to come up to expectations.

How can these problems be understood? Many factors have certainly contributed but in my judgment neoclassical economics as disciplinary paradigm and neo-liberalism as ideology are among the most important. If actors in society have failed, this can largely be attributed to the mental maps they have used for guidance and these mental maps are largely connected with dominant ideas about economics (as conceptual framework and ideology) and neo-liberalism as a dominant ideology in many circles. Thousands of students, now in professional positions, have learnt neoclassical micro- and macroeconomics over the years and have supported each other and been supported by their professors to further strengthen the neoclassical perspective.

Studying neoclassical economics would have been less of a problem if also alternative theoretical perspectives had been taught at university departments of economics. But the strategy has instead been to strengthen the neoclassical monopoly. It is up to the reader to judge whether neoclassical economics by itself and in combination with neo-liberalism explains some parts of the ecological and financial crisis that we now experience. Since neoclassical economics emphasizes the monetary dimension, one might expect that at least monetary issues are well considered in the paradigm but these days we even doubt if this is the case. Something may be missing in terms of interdisciplinary openings, including social psychology and also ethical considerations.

In any case, neoclassical economists in leading positions should be held responsible and accountable for limiting research and education to one paradigm. As I have argued previously, each paradigm is specific not only in scientific terms (with respect to conceptual framework and theory) but also in ideological terms. Limiting education in economics to one paradigm means that university departments of economics are degraded to political propaganda centres.

death of an illusion...,

Reality Sandwich | We think that those Wall Street tycoons absconded with billions, but what are these billions? They too are numbers in computers, and could theoretically be erased by fiat. The same with the money we owe China. It could be gone with a simple declaration. We can thus understand the massive giveaways of money in the TARP, TALF, and PPIF programs as yet another exercise in perception management, though this time it is an unconscious exercise. These giveaways are ritual acts that attempt to perpetuate a story, a matrix of agreements, and the human activities that surround it. They are an attempt to uphold the magical power of the voodoo chits that keep the college grad on a career path and the middle-aged man enslaved to his mortgage; that give the power to a few to move literal mountains, while keeping the many in chains.

Speaking of China, I find it instructive to look at the physical reality underlying the trade deficit. Basically what is happening is that China is shipping us vast quantities of stuff -- clothes, toys, electronics, nearly everything in Wal-Mart -- and in return we rearrange some bits in some computers. Meanwhile, Chinese laborers work just as hard as we do, yet their day's wages buy much less. In the old days of explicit empires, China would have been called a "vassal state" and the stuff it sends us would have been called "tribute." Yet China too will do everything it can to sustain the present Story of Money, for essentially the same reason we do: its elites benefit from it. It is just as in Ancient Rome. The elites of the imperial capital and the provinces prosper at the expense of the misery of the people, which increases over time. To keep it in check, in the capital at least, the masses are kept docile and stupid with bread and circuses: cheap food, cheap thrills, celebrity news, and the Superbowl.

Whether we declare it to end, or whether it ends of its own accord, the story of money will bring down a lot with it. That is why the United States won't simply default on its debt. If it did, then the story under which the Middle East ships us its oil, Japan its electronics, India its textiles, and China its plastic would come to an end. Unfortunately, or rather fortunately, that story cannot be saved forever. The reasons are complex, so I'll just point you in the right direction if you want to research it yourself. Essentially, at some point China (and other creditor nations) will have to appreciate its currency, replace exports with domestic demand, and raise interest rates in order to combat disastrous inflation caused by its pumping yuan into its economy in exchange for all the dollars flowing in from its exporters. The result will be a run on the dollar, a global calamity that will put an end to money as we have known it. When that happens, our government will have only two choices: extreme austerity measures such as those we have long perpetrated on other countries through the IMF, or a bout of currency-destroying hyperinflation. The latter is probably inevitable; austerity would only stave it off temporarily. That would be the end of our current story of money, for it would render all financial wealth (and debt) worthless.

When money evaporates as it is doing in the current cycle of debt deflation, little changes right away in the physical world. Stacks of currency do not go up in flames (but even if they did, that is not too momentous a physical event). Factories do not blow up, engines do not grind to a halt, oil wells do not dry up, people's economic skills do not disappear. All of the materials and skills that are exchanged in human economy, upon which we rely for food, shelter, transportation, entertainment, and so on, still exist as before. What has disappeared is our capacity to coordinate our activities and focus our common efforts. We can still envision a new airport, but we can no longer build it. The magic talisman by which the pronouncement, "An airport shall be built here" crystallizes into material reality has lost its power. Human hands, minds, and machinery retain all their capacities, yet we can no longer do what we once could do. The only thing that has changed is our perceptions.

h.r. 875 stupidity...,

Ran Prieur | March 9. Everybody chill out about H.R. 875. That link goes to a full paranoid analysis on Cryptogon. In theory, this law could have federal agents stomping through your vegetable garden and fining you a million dollars for failing to get a permit. In practice, this is a move by occult trickster entities to grow and harvest emotions of fear and victimization from the fertile soil of the foilhead crowd.

I swear, anti-government people worship the government. Nobody else has such unwavering belief in the government's omniscience and omnipotence. Anything the government writes on paper is assumed to be magically done. This analysis on Campaign for Liberty says the law "will literally put all independent farmers and food producers out of business due to the huge amounts of money it will take to conform to factory farming methods." You know, you don't have to do everything you're told. Why not say instead that this will put the government out of business due to the huge amounts of money it will take to enforce the law against millions of small food producers?

We're in the position of strength here. Look at all the ways the file sharers have dodged the copyright cartel, and they're sharing fragile high-tech artifacts that require sophisticated computer equipment and electricity. We're sharing life, seeds that can remain viable for hundreds of years, plants that need only dirt and water and sunlight, animals that can live on table scraps in the garage, species that have duplicated themselves, in many cases without human help, for thousands or millions of years. Look at what happened when they tried to eradicate cannabis, and imagine them trying to fight the same war on a thousand fronts, never mind the tens of thousands of species they don't even know are edible. Seriously, I hope the agriculture giants really do try to stop all independent food production, because we will stuff them in the compost bin of history.

the big takeover

Rolling Stone | The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution. It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream.

rapid declines in manufacturing spread global anxiety

NYTimes | Since it was founded by his great-grandfather in 1880, Carl Martin Welcker’s company in Cologne, Germany, has mirrored the fortunes of manufacturing, not just in Europe but around the world.

That is still true today. In a pattern familiar to industrial businesses in Europe, Asia and the United States, Mr. Welcker says his company, Schütte, which makes the machines that churn out 80 percent of the world’s spark plugs, is facing “a tragedy.”

Orders are down 50 percent from a year ago, and Mr. Welcker is cutting costs and contemplating layoffs to prevent Schütte from falling into the red.

That manufacturing is in decline is hardly surprising, but the depth and speed of the plunge are striking and, most worrisome for economists, a self-reinforcing trend not unlike the cascading bust that led to the Great Depression.

In Europe, for example, where manufacturing accounts for nearly a fifth of gross domestic product, industrial production is down 12 percent from a year ago. In Brazil, it has fallen 15 percent; in Taiwan, a staggering 43 percent.

Even in China, which has become the workshop of the world, production growth has slowed, with exports falling more than 25 percent and millions of factory workers being laid off.

In the United States, until recently a relative bright spot for manufacturing despite the steady erosion of blue-collar jobs, industrial output fell 11 percent in February from a year ago, according to statistics released Monday by the Federal Reserve.

“Manufacturing has fallen off the cliff, and it’s certainly the biggest decline since the Second World War,” said Dirk Schumacher, senior European economist with Goldman Sachs in Frankfurt.

The pattern of manufacturing and trade ominously recalls how the financial crisis of 1929 grew into the Great Depression: tightening credit and consumer fear reduced demand for manufactured goods in one country after another, creating a downward spiral that reduced global trade.

situationism....,

So Harvard calls the study of something vaguely reminiscent of "dopamine hegemony", situationism, interesting.

The Situationist | Situationism is premised on the social scientific insight that the naïve psychology—that is, the highly simplified, affirming, and widely held model for understanding human thinking and behavior—on which our laws and institutions are based is largely wrong. Situationists (including critical realists, behavioral realists, and related neo-realists) seek first to establish a view of the human animal that is as realistic as possible before turning to legal theory or policy. To do so, situationists rely on the insights of scientific disciplines devoted to understanding how humans make sense of their world—including social psychology, social cognition, cognitive neuroscience, and related disciplines—and the practices of institutions devoted to understanding, predicting, and influencing people’s conduct—particularly market practices. Jon Hanson & David Yosifon, The Situation: An Introduction to the Situational Character, Critical Realism, Power Economics, and Deep Capture, 152 U. Pa. L. Rev. 129, 149–77 (2003).

Situationism has been applied to such topics as power economics, natural disasters, obesity, commerical speech and junk-food advertising, Supreme Court dynamics, racial injustice, affirmative action, race and rape, employment discrimination, employee adherence to workplace rules, legitimization of war, inside counsel, corporate law, and player autonomy in the National Basketball Association, among other topics.

scenes from the depression...,

Fist tap to Big Don...,

missouri report draws criticism

KCStar | A new document meant to help Missouri law enforcement agencies identify militia members or domestic terrorists has drawn criticism for some of the warning signs mentioned.

The Feb. 20 report called "The Modern Militia Movement" mentions such red flags as political bumper stickers for third-party candidates, such as U.S. Rep. Ron Paul, who ran for president last year; talk of conspiracy theories, such as the plan for a superhighway linking Canada to Mexico; and possession of subversive literature.

"It seems like they want to stifle political thought," said Roger Webb, president of the University of Missouri campus Libertarians. "There are a lot of third parties out there, and none of them express any violence. In fact, if you join the Libertarian Party, one of the things you sign in your membership application is that you don't support violence as a means to any ends."

But state law enforcement officials said the report is being misinterpreted.

Lt. John Hotz of the Missouri State Highway Patrol said the report comes from publicly available, trend data on militias. It was compiled by the Missouri Information Analysis Center, a "fusion center" in Jefferson City that combines resources from the federal Department of Homeland Security and other agencies. The center, which opened in 2005, was set up to collect local intelligence to better combat terrorism and other criminal activity, he said.

"All this is an educational thing," Hotz said of the report. "Troopers have been shot by members of groups, so it's our job to let law enforcement officers know what the trends are in the modern militia movement."

But Tim Neal, a military veteran and delegate to last year's state GOP convention, was shocked by the report's contents.

"I was going down the list and thinking, 'Check, that's me,'" he said. "I'm a Ron Paul supporter, check. I talk about the North American union, check. I've got the 'America: Freedom to Fascism' video loaned out to somebody right now. So that means I'm a domestic terrorist? Because I've got a video about the Federal Reserve?"

Neal, who has a Ron Paul bumper sticker on his car, said the next time he is pulled over by a police officer, he won't know whether it's because he was speeding or because of his political views.

"If a police officer is pulling me over with my family in the car and he sees a bumper sticker on my vehicle that has been specifically identified as one that an extremist would have in their vehicle, the guy is probably going to be pretty apprehensive and not thinking in a rational manner," Neal said. "And this guy's walking up to my vehicle with a gun."

But Hotz said using factors in the report to determine whether someone could be a terrorist is not profiling. He said people who display signs or bumper stickers from third-party groups are not in danger of harassment from police.

"It's giving the makeup of militia members and their political beliefs," Hotz said of the report. "It's not saying that everybody who supports these candidates is involved in a militia. It's not even saying that all militias are bad."

unsustainable way of life....,

Joe the Planner | The proverbial elephant in the room is the amount of sprawling, redundant public and private infrastructure we’ve built since the end of World War II. This exodus to the suburbs quickly resulted in the hollowing-out of major parts of older cities and towns. Furthermore, the overwhelming majority of this development is automobile-based. Places to live, work, shop, and play are intentionally separated by vast distances. Low-density, separated-use zoning has ensured that there is far more infrastructure to maintain per-person than in older village, town, or city neighborhoods.

For this suburban system to function, residents are required to own, operate, and maintain a car. Or two. Or three. Nobody knows this better than the typical suburban family. While car ownership is expensive enough, it is not simply a matter of gasoline and monthly payments. The automobile incurs another immense cost: cars can’t operate without lots of flat, smooth, publicly-funded road infrastructure (read: roads, highways, and the accompanying electric, gas, water, and sewer utilities).

All of this is stupefyingly expensive. These indirect costs constitute the majority of the expense, yet remain invisible to most people—spread-out in the form of local, state, and federal taxes, or camouflaged as municipal bond debt or various other forms of government debt. So in addition to being redundant, this means that suburbia is a doubly expensive living arrangement.

The other point that I’m trying to make is that the migration of wealth to the suburbs has not been a free-market phenomenon. Customer choice is only a small part of the equation, or this wouldn’t have happened in virtually every American city at the exact same time in the exact same way. Which, of course, is exactly how it did happen.

I assert that much of the economic crisis we’re seeing today is simply the end result of decades of bad decisions driven by bad economic, transportation, housing, and land-use policy.

IOUSA

It's been over a year since we invoked the name of former Comptroller General of the U.S. David Walker. I.O.U.S.A. boldly examines the rapidly growing national debt and its consequences for the United States and its citizens. Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.

Throughout history, the American government has found it nearly impossible to spend only what has been raised through taxes. Wielding candid interviews with both average American taxpayers and government officials, Sundance veteran Patrick Creadon (Wordplay) helps demystify the nation's financial practices and policies. The film follows former U.S. Comptroller General David Walker as he crisscrosses the country explaining America's unsustainable fiscal policies to its citizens.

storytelling

Physorg | New search engine can be used for creative discovery. When you ask a supercomputer to tell a story, you might not expect a creative outcome – or any. But a group of Virginia Tech researchers are using System X, the university’s supercomputer, to test a new search program that can tell the stories of life – the connections between gene sets, for instance, or the connections between discoveries reported in biomedical articles on the U.S. National Library of Medicine PubMed database.

We are all familiar with search engines that provide a list of hits on the terms we enter. Researchers in computer science and biochemistry at Virginia Tech have created a search capability that they call Storytelling that will discover connections between information that appears dissimilar. It discovers a sequence of events or relationships to create a chain of concepts between specified start and end points. Imagine, for instance, asking for a connection from the concept “traveling in London,” to the concept “places popes are interred.” The Storyteller might postulate “the history of codes” as an intermediary and find the Da Vinci Code – if it existed.

“The stories are pieced together by analyzing large volumes of text or other data” said Naren Ramakrishnan, associate professor of computer science at Virginia Tech who works with life scientists to create software for data mining and information analysis tasks arising in biology. The aim is to help scientists make connections in the complex, burgeoning world of scientific discovery. “Everyday, there are new research results reported in the literature and there are discoveries waiting to be made by exploring connections,” said Ramakrishnan.

“Our minds cannot correlate all available datasets efficiently and with any high degree of confidence without the aid of computational biology,” said Richard Helm, associate professor of biochemistry. “Attempting to find significant correlations within the ocean of online datasets is daunting. However, there may be experiments that have been published in the literature that look at particular subsets of a biological process. The storytelling algorithm links ‘distant’ objects by finding these closer connections and drawing them together in a storyline. Evaluation of these stories can provide hypotheses that can be tested at the bench, potentially resulting in new insights into the role of a particular molecular event in the process you are interested in.”

The design of the storytelling algorithm is modeled after large scale search engines such as Google. Each “node” in System X, an 1100 Apple Xserve G5 cluster supercomputer, is responsible for indexing a portion of the biological literature and the nodes exchange information among each other to help define links and make connections. “Some of our larger storytelling runs process hundreds of thousands of papers and work with up to 200 nodes simultaneously,” said Ramakrishnan.

mexico city's rainwater

Bloomberg | Mexico plans to tackle a chronic shortage of clean water by building an $800 million purification plant for its sprawling capital city of 20 million inhabitants.

The facility to treat 23 cubic meters (6,076 gallons) of rain and runoff each second will be announced for bid on March 31 by Conagua, the nation’s water authority, General Manager Jose Luis Luege Tamargo said in an interview yesterday.

The world’s supply of fresh water has shrunk as aquifers and waterways, including the Colorado River in the U.S., are drawn down by farmers, parched cities or water-intensive industries such as mining. The Mexican economy, Latin America’s second- largest, has failed to keep pace, and its water supplies per inhabitant have dropped by more than 75 percent since 1950.

“We are investing all we can to manage this resource,” Tamargo said in Istanbul where he attended the international World Water Forum. “Saving water is a priority.”

The triennial conference, run by the Marseille, France-based World Water Council, brings together officials from environmental groups, governments, academia and water agencies for a week of debate on solutions to water issues.

“Virtually any of the big Spanish construction companies could do this job,” said Rafael Fernandez, an analyst at Caja Madrid Bolsa in Madrid. “They all have the expertise,” he said, adding France’s Veolia Environnement SA to the group. A spokesman for the Paris-based company declined to comment.

who owns the rain?

LATimes | Every time it rains here, Kris Holstrom knowingly breaks the law.

Holstrom's violation is the fancifully painted 55-gallon buckets underneath the gutters of her farmhouse on a mesa 15 miles from the resort town of Telluride. The barrels catch rain and snowmelt, which Holstrom uses to irrigate the small vegetable garden she and her husband maintain.

But according to the state of Colorado, the rain that falls on Holstrom's property is not hers to keep. It should be allowed to fall to the ground and flow unimpeded into surrounding creeks and streams, the law states, to become the property of farmers, ranchers, developers and water agencies that have bought the rights to those waterways.

What Holstrom does is called rainwater harvesting. It's a practice that dates back to the dawn of civilization, and is increasingly in vogue among environmentalists and others who pursue sustainable lifestyles. They collect varying amounts of water, depending on the rainfall and the vessels they collect it in. The only risk involved is losing it to evaporation. Or running afoul of Western states' water laws.

Those laws, some of them more than a century old, have governed the development of the region since pioneer days.

"If you try to collect rainwater, well, that water really belongs to someone else," said Doug Kemper, executive director of the Colorado Water Congress. "We get into a very detailed accounting on every little drop."

Frank Jaeger of the Parker Water and Sanitation District, on the arid foothills south of Denver, sees water harvesting as an insidious attempt to take water from entities that have paid dearly for the resource.

"Every drop of water that comes down keeps the ground wet and helps the flow of the river," Jaeger said. He scoffs at arguments that harvesters like Holstrom only take a few drops from rivers. "Everything always starts with one little bite at a time."

bleak, bleaker, bleakest...,

Last I saw of Lovelock, his pronouncements, while bleak, had not reached the present level of bleakness.

Reuters | Climate change will wipe out most life on Earth by the end of this century and mankind is too late to avert catastrophe, a leading British climate scientist said.

James Lovelock, 89, famous for his Gaia theory of the Earth being a kind of living organism, said higher temperatures will turn parts of the world into desert and raise sea levels, flooding other regions.

His apocalyptic theory foresees crop failures, drought and death on an unprecedented scale. The population of this hot, barren world could shrink from about seven billion to one billion by 2100 as people compete for ever-scarcer resources.

"It will be death on a grand scale from famine and lack of water," Lovelock told Reuters in an interview on Wednesday. "It could be a reduction to a billion (people) or less."

By 2040, temperatures in European cities will rise to an average of 110 Fahrenheit (43 Celsius) in summer, the same as Baghdad and parts of Europe in the 2003 heatwave.

"The land will gradually revert to scrub and desert. You can look at as if the Sahara were steadily moving into Europe. It's not just Europe; the whole world will be changing in that way."

Attempts to cut emissions of planet-warming gases such as carbon dioxide (CO2) in an attempt to reduce the risks are probably doomed to failure, he added.

Even if the world found a way of cutting emissions to zero, it is now too late to cool the Earth.

"It is a bit like a supertanker. You can't make it stop by just turning the engines off," he said before the release of a new book on climate change.

the age of stupid

Looks interesting...,

an army of jacks

Reality Sandwich | In fairy tales, humans can possess exterior souls, things magically containing or embodying individual life force -- stone, egg, ring, bird or animal, etc. If the thing is destroyed, the human dies. But while the thing persists, the human enjoys a kind of immortality or at least invulnerability.

Money could be seen as such an exteriorized soul. Humans created it, in some sense, in order to hide their souls in things that could be locked away (in tower or cave) and hidden so their bodies would acquire magical invulnerability -- wealth, health, the victoriousness of enjoyment, power over enemies -- even over fate.

But these exterior souls need not be hidden away -- they can be divided almost indefinitely and circulated, exchanged for desire, passed on to heirs like an immortal virus, or, rather like a dead thing that magically contains life and "begets" itself endlessly in usury. It constitutes humanity's one really totally successful experiment in magic: no one calls the bluff and after 6000 years, it seems like Nature. (In fact, an old Chinese cosmogonic text claimed the two basic principles of the universe are Water and Money.)

It's worth noting that in marchen, folk tales, the characters with external souls are often the villains. Clearly, the practice must appear uncanny to any normal society -- in which magic (call it collective consciousness in active mode) is channeled through ritual and custom to the life of all -- not the aggrandizement of one against all (black magic or witchcraft). In the form of money, the exterior soul, shattered into fragments, so to speak, can be put into circulation but also stolen, monopolized, guarded by dragons, so that some unlucky humans can be stripped of all soul, while others gorge or hoard up soul-bits of ancestors and victims in their goulish caves or "banks," etc.

The beloved in the tale may also have an exterior soul. It falls into the grasp of the evil sorcerer or dragon and must be rescued. In other words, desire, which is alienated in the form of a symbolic object (reified, fetishized), can only be restored to its true fate (love) by re-appropriation from the expropriator, stealing it back from the wizard. The task falls to "Jack," the third and youngest, sometimes an orphan or disinherited, possibly a fool, a peasant with more heart than any prince, generous, bold, and lucky.

Exactly the same story can be seen acted out in every honest ethnographic report on the introduction of money into some pre-monetary tribal economy. Even without the usual means of force, terror, oppression, colonialist imperialism or missionary zeal, money alone destroys every normal culture it touches.

efforts against cartels lacking?

Washington Post | "We are not winning the battle," Goddard told members of the Senate Judiciary subcommittee on crime and drugs. Lawmakers joined Goddard in calling for a stronger federal response, including heightened efforts to stanch the illicit stream of thousands of American guns and billions of dollars in cash annually flowing southward across the border.

"Mexican drug cartels . . . pose a direct threat to Americans," said Senate Majority Whip Richard J. Durbin (D-Ill.), the subcommittee chairman, noting that they now operate in at least 230 U.S. cities, up from about 50 in 2006.

But their joint alarm over the rising drug-related violence in northern Mexico -- where more than 1,000 people have been slain since the beginning of the year -- was not shared by officials at the hearing from the three principal agencies responsible for helping the Mexican government: the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Immigration and Customs Enforcement branch of the Department of Homeland Security.

Anthony P. Placido, the DEA's top intelligence official, said his agency believes that Mexican President Felipe Calderón is still "making important strides" against the cartels. The recently increasing violence mostly reflects the criminal networks' "desperate effort to resist," he said.

"The violence we see is actually a signpost of success," Placido said.

A darker picture was presented by Denise Dresser, a Princeton-educated professor of political science in Mexico City, who warned that recent U.S. assistance in fighting drug trafficking has had only mixed success. Cocaine traffickers now spend more than twice the attorney general's budget just for bribes; 450,000 citizens are involved in the drug trade; and more than 2,000 weapons a day are smuggled south to fuel the battle between cartels and against the Mexican government, she said.

"Mexico is becoming a country where lawlessness prevails, where more people died in drug-related violence last year than those killed in Iraq, where the government has been infiltrated by the mafias and cartels it has vowed to combat," Dresser said. "Although many believe that Obama's greatest foreign policy challenges lie in Pakistan or Iran or the Middle East, they may in fact be found in the immediate neighborhood."

los tios

NYTimes | First the soldiers came to Río Seco, a coca-growing village in the lush mountain jungles of southern Peru. “They called us subversives and they opened fire,” said Benedicto Cóndor, 55, a coca farmer. They shot dead four people at close range, including a woman who was five months pregnant, witnesses said. Two children, ages 6 and 1, disappeared and are believed dead.

Four months later, the guerrillas arrived, accusing the villagers of helping the military. They abducted the village leader, who has not been seen since.

The harrowing tales of violence trickling out of the jungle as dozens of families have fled their villages in recent months raise an ominous specter: a brutal war that terrorized the country for two decades may be sparking back to life.

The war against the Shining Path rebels, which took nearly 70,000 lives, supposedly ended in 2000.

But here in one of the most remote corners of the Andes, the military, in a renewed campaign, is battling a resurgent rebel faction. And the Shining Path, taking a page from Colombia’s rebels, has reinvented itself as an illicit drug enterprise, rebuilding on the profits of Peru’s thriving cocaine trade.

The front lines lie in the drizzle-shrouded jungle of Vizcatán, a 250-square-mile region in the Apurímac and Ene River Valley. The region is Peru’s largest producer of coca, the raw ingredient for cocaine.

As the military and the rebels skirmish for control of isolated coca-producing hamlets, the reports of rising body counts and civilians killed in the cross-fire, still far lower than the carnage at the height of the Shining Path war in the 1980s and early 90s, are rousing ghosts most Peruvians thought were long dead.

washington's war on narco-terrorism

Global Research | NAFTA is in fact more than a trade agreement, it’s a trade bloc, the size of which rivals the European Union as the world’s largest. A trade bloc is essentially an agreement between countries on economic integration, which inevitably includes varying levels of political and military agreements. Also, every trade bloc has a dominant member — which in NAFTA’s case is the U.S.

When NAFTA was enacted, a new flood of U.S. corporate and private investment flooded into Mexico, requiring that this money be well protected. For the international investor, political instability of any kind is bad for business. This is in fact why NAFTA was extended into the “Security and Prosperity Agreement,” which provides U.S. security (military) aid to protect the NAFTA-created prosperity (investments) inside of Mexico.

In speaking of security and foreign investment, The World Bank’s website says:
“We act as a potent deterrent against [foreign] government actions that may adversely affect investments. And even if disputes do arise, our leverage with host governments frequently enables us to resolve differences to the mutual satisfaction of all parties.” Such security is ultimately guaranteed by the U.S. military.

U.S. investors had a valid fear that their investments in Mexico needed extra protecting. Social inequalities in the country have been intensifying for years, and the poor’s standard of living has continued to deteriorate. This deterioration promised to continue because of the extremely fragile Mexican economy, which was especially vulnerable for the following reasons:

1) Commodities coming in from the U.S. because of NAFTA promised to out-compete and destroy Mexican farmers and businesses.
2) Mexico is highly dependent on high oil prices that have since plummeted.
3) Mexico is highly dependent on U.S. foreign investors whose investments have tapered off (because of the recession)
4) Mexican exports to the U.S. – 80% of its total exports — have sharply declined because of U.S. workers’ inability to consume them.
5) Remittances from Mexicans living in the U.S. have dropped sharply due to the recession.

This economic situation promised that the Mexican working class would be pushed into desperation, and that police-state measures would be needed to control them, since they might demand that U.S. owned corporations in Mexico should instead be used for ordinary Mexicans. Those who didn’t emigrate to escape the crumbling economy would likely rise up.

feds to combat border violence

AP | The Obama administration plans to send reinforcements to the Southwest border to help contain the rampant violence of the Mexican drug cartel wars.

Thirty-seven agents from the Bureau of Alcohol, Tobacco and Firearms are being deployed to the region. An official familiar with the plan said the Immigration and Customs Enforcement Agency is considering reassignment of at least 90 officers to the border.

The official requested anonymity because the plan has not yet been announced.

The deployments are part of President Barack Obama's first moves to boost federal security sources on the U.S. side of the border.

The additional immigration agents would double the size of an ongoing ICE task force that has been working with other federal agencies to fight the criminal organizations contributing to the border violence.

The ATF agents will be added to anti-gunrunning teams in McAllen, Texas, El Centro, Calif., and Las Cruces, N.M., as well as to U.S. consulates in Juarez and Tijuana. Some of the reinforcement costs will be covered with economic recovery money recently approved by Congress.

The U.S.-Mexico border has been a different problem for Obama than it was for his predecessor, George W. Bush. While Bush sent National Guard troops to stem the flow of illegal immigrants, Obama's first moves are designed more to keep violence from spilling across the border.

quit or commit suicide

Politico | Sen. Charles Grassley is so angry over AIG bonuses that he says the executives should resign or kill themselves.

In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: “The first thing that would make me feel a little bit better towards them if they’d follow the Japanese model and come before the American people and take that deep bow and say I’m sorry, and then either do one of two things — resign, or go commit suicide.”

Obama squanders political capitol over AIG payouts. A tidal wave of public outrage over bonus payments swamped American International Group yesterday. Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all.

President Obama's apparent inability to block executive bonuses at insurance giant AIG has dealt a sharp blow to his young administration and is threatening to derail both public and congressional support for his ambitious political agenda.

The Obama administration was already facing a skeptical public and members of Congress critical of the huge sums of money the government has allocated to shoring up the devastated financial system.

News of the latest AIG bonuses only compounded the political problems that the huge expenditures pose for the president. The administration has tried to manage the public anger by expressing empathy with the outrage over the large outlays to financial firms, while explaining that they are necessary to stabilize the economy.

What's most amusing and most instructive in all the ballyhoo about AIG bonus payouts, however, is the fact that news of the bonus payouts has completely overshadowed news of the $50 Billion paid out to foreign owned banks. When it emerged on Sunday that foreign banks had received more than $50bn of US federal funds as part of the AIG bail-out, big beneficiaries such as Deutsche Bank and Société Générale must have braced themselves for an outcry in Washington.

Instead, the reaction has been muted as US politicians focus instead on revelations about the $165m of bonus payments to AIG employees in spite of the insurance group’s multi-billion dollar losses.

Barney Frank, chairman of the House financial services committee, said questions would be raised about the payments to foreign banks at a planned hearing on AIG on Wednesday.

But he acknowledged that anger about taxpayer money flowing overseas had been “displaced” by the bonus issue. More than 20 banks in Canada and seven European countries benefited from the bail-out as counterparties to derivatives contracts and financial deals with AIG. The biggest winners were French banks, with Société Générale receiving $11.9bn and BNP Paribas $4.9bn. Deutsche Bank of Germany received $11.8bn and Barclays of the UK $8.5bn.

Most prominent figures on Capitol Hill appeared to accept that the payments were unavoidable given how interwoven AIG was in the global financial system.